Sunday, February 1, 2009

Real Time Experiment in Patent Economics

On April 16 of this year U.S. Patents 5,020,694 and 5,038,963 will expire. These two patents cover an early version of the Mentadent toothpaste dispenser, which did not accomodate refills. For those unfamiliar, Mentadent is a style of toothpaste in which two different flowable substances come out of the dispenser simultaneously onto one's toothbrush. A number of interesting questions will then be answered:

1. Is it important enough to be able to refill the Mentadent base, that competitors will be dissuaded from entering the market until the patent on a refillable version expires (there are two such patents, for different refillable versions). 

2. The really interesting question will only be answered (in the next few years) if the answer to the first question is "no." And that is, will there be a "tragedy of the commons" which kills Mentadent style toothpaste? It seems possible that if there are new market entrants upon patent expiration, that this could create a situation in which all the profits of Mentadent style toothpaste are eaten up by competition, and there is no profitable market left. This would seem a strange result, but I would maintain that for a niche product like Mentadent, which depends on advertising to educate consumers, that a negative cycle could be started by competition that would end up destroying the niche. We will see eventually, with the time frame depending on how important it is to have a resusable base. 

This type of patent question does seem remarkably similar to wildlife biology, with the competing creatures lunging for the consumer. The bout begins April 16 (or shortly thereafter).

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